The National Financial Reporting Authority (NFRA) was constituted on 1st October 2018 by the
Government of India under Sub Section (1) of section 132 of the Companies Act, 2013.
As per Sub Section (2) of Section 132 of the Companies Act, 2013, the duties of the NFRA are to:
- Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;
- Monitor and enforce compliance with accounting standards and auditing standards;
- Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;
- Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.
- Sub Rule (1) of Rule 4 of the NFRA Rules, 2018, provides that the Authority shall protect the public interest and the interests of investors, creditors, and others associated with the companies or bodies corporate governed under Rule 3 by establishing high-quality standards of accounting and auditing and exercising effective oversight of accounting functions performed by the companies and bodies corporate and auditing functions performed by auditors.
Technical Advisory Committee (TAC)
The audit regulator, National Financial Reporting Authority (NFRA), has constituted a Technical Advisory Committee (TAC) under the Chairmanship of R Naravanaswamy, Professor, Indian Institute of Management, Bengaluru.
- The terms of reference of TAC include advising on the development of measures of audit quality; advice on suitable methods for promoting awareness relating to compliance with accounting and auditing standards and the role of the NFRA in protecting investors through independent auditor regulation.
- The TAC, which comprises seven members, including the Chairman, would, among other things, aid and advise the Executive Body of the NFRA on issues related to the drafts of accounting standards and auditing standards. It will also provide inputs from the perspectives of users, preparers, and auditors of financial statements.
Reference - https://nfra.gov.in/